Trust is the Foundation of a Software Escrow

It might seem like putting together an intellectual property or software escrow is about guarding against wrongdoing, but in reality, it is a great representation of trust for both sides. It is just an extension of the trust that has already been going on for some time, and it enables everyone to breathe a little easier knowing the that the unexpected is accounted for.

Getting into business in the first place is an exercise in trust, if you think about it. Customers have to trust your brand, you have to trust that the choices you are making in terms of product line, website design, software package and others are the right choices to make. If you have ever had customized software, then you should know that what you are getting is the “object code” – the front piece that makes the software run. The heart of the software is the “source code,” its guts, its essence, so to speak. This code is a developer’s intellectual property, the bread and butter, as it were, of a developer’s profits. They don’t want to share it, and understandably, they want to protect their investment.

But there are issues for your business if the developer should go bankrupt. No one wants a critical software disruption. That can literally bring a business to its knees, costing huge sums in lost revenue. So a software escrow agreement helps protect both parties. It clearly specifies when the escrow will be triggered, who is entitled to what and under what terms and conditions. Ultimately, the goal is to continue to do business should the unforeseen happen.

Escrow agreements are not meant to take anything away from anyone in terms of intellectual property – they are meant to develop trust between both parties and to provide while still providing the protection both parties need.